OODA Loops and Economic Development

Source: frjohnpeck.com

OODA Loops? Is this some new breakfast cereal? Not exactly…

Source:  U.S. Government
via Wikimedia Commons

The OODA Loop is a concept business people and basketball coaches borrowed from the military to show how to get an edge on a competitor. It was developed by the late U.S. Air Force Colonel John R. Boyd in 1974 to explain how a fighter pilot can confuse an opponent and gain the upper hand by accelerating the combat faster than the opponent can see what’s happening (observe), size up the problem (orientation), decide what to do, and act accordingly.  

In his biography of Boyd, Robert Coram explained, “The advantage gained from the fast transient [i.e., rapid change] suggests that to win in battle a pilot needs to operate at a faster tempo than his enemy. It suggests he must stay one or two steps ahead of his adversary; he must operate inside his adversary’s time scale.”

Okay…I can see how this works in sports, especially in basketball when a team surprises its opponent by executing a fast break. I can even see how it works in business, as when Netflix snuck up on Blockbuster and stole its market share. But I’m still not sure how the OODA loop relates to economic development.

 

The OODA loop works in any situation where time and competition intersect. States compete for economic development by dangling incentives to businesses in other states. The states on the opposite side of these economic development fast breaks scramble to come up with their own incentive packages to discourage the targeted business from relocating. 

 

The OODA loop suggests at least two things for economic development policy makers. First, identify your strengths and weaknesses and determine who can exploit them and how. Second, identify other states’ strengths and weaknesses and determine if your state has a competitive edge.

 

Source: radio-weblogs.com

But maybe there’s more to the interstate competition for economic development. Maybe the competition is being driven by technological change as well as state incentive packages. These changes, especially those in telecommunications and information technology, allow many types of businesses to operate anywhere in the world. If that’s the case, then state incentives may tip the balance, making the difference between a choice of several viable locations.  

A final word: Borrowing an idea or tool developed to explain aerial combat and using it to understand economic development is an example of exaptation, a concept Steve Johnson discussed in his book, Where Good Ideas Come From: That Natural History of Innovation. As Johnson explained, Guttenberg got the idea for the printing press after seeing how the screw press was used to squeeze grapes for wine.

Mindtools.com has more information on OODA Loops.

A detailed depiection of an OODA Loop.

Source: Patrick Edwin Moran